| The Tax Publishers2020 TaxPub(EX) 1012 CENTRAL EXCISE ACT, 1944
Section 11A(1)
Where Revenue failed to find out any inconsistency in the records of assessee, nor there was any seizure of any consignment of goods being raw materials or finished goods, being transported without the documents or clandestinely, further, in spite of the names being found of the parties to whom the alleged clandestine removal was despatched, therefore, demand against assessee was not sustainable, in absence of sufficient evidence of clandestine manufacture and removal of the goods.
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Demand of excise duty - Clandestine manufacture and removal - MS ingots - Corroborative evidences or not
Assessee was engaged in the manufacture of M.S. ingots, Runners & Risers and Steel Shots and Grits, which are dutiable. They were availing facility of Cenvat credit on the inputs used in the manufacture of aforementioned final products. Revenue having intelligence that induction furnace units, in general, which were engaged in the manufacture of M.S. Ingots, were engaged in clandestine manufacture and removal and were not disclosing their true production and clearance to the Revenue. During the course of search, an amount was recovered from the premises along with incriminating documents like diaries, files, ledger, etc. It was seized by central excise officers, on the assumption that amount was part of the sale proceeds of clandestinely removed excisable goods, on which the manufacturers have not paid the due central excise duty. Held: Revenue failed to find out any inconsistency in the records of assessee, nor there was any seizure of any consignment of goods being raw materials or finished goods, being transported without the documents or clandestinely. It was also observed that although the third party records are good evidence of suspicion of clandestine activity, but the same cannot be adopted for concluding the charge of clandestine removal in the absence of corroborative evidence. Further, in spite of the names being found of parties, to whom the alleged clandestine removal was despatched, there was no further inquiry made from the alleged receivers of goods. Therefore, demand against assessee was not sustainable, in absence of sufficient evidence of clandestine manufacture and removal of the goods.
Relied:Commissioner of C. Ex., Meerut-I v. R.A. Castings (P) Ltd. 2011 (269) ELT 337 (All) : 2011 TaxPub(EX) 954 (All) Rudra Ventures (P) Ltd. v. Commissioner of C. Ex. 2016 (344) ELT 472 (Tribunal) M/s. Raipur Forging (P) Ltd., Shri Sunil Kedia, Krishna Iron Strips & Tubes (P) Ltd., Shri Sunil Agarwal, Shri Ram Rolling Mill, Shri Sandeep Gidwani v. CCE 2016 (335) ELT 297 (T) : 2016 TaxPub(EX) 777 (Del) C.C.E. & S.T. Raipur v. P.D. Industries (P) Ltd. 2016 (340) ELT 249 (Del) : 2016 TaxPub(EX) 1723 (Del) Commr. of C. Ex., Coimbatore v. Chola Spinning Mills (P) Ltd. 2009 (246) ELT 267 (Tribunal-Chennai) : 2009 TaxPub(EX) 3502 (Chen) R.A. Castings (P) Ltd. v. Commissioner of C. Ex. 2009 (237) ELT 674 (Del) : 2009 TaxPub(EX) 1379 (Del)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE CESTAT, NEW DELHI BENCH
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